Home » Economy » Luxury goods – Investors go to Richemont in lauer position | News

Luxury goods – Investors go to Richemont in lauer position | News

Wednesday, September 13th, 2017 | Economy

For weeks, the luxury goods group Richemont has been rumored to have a strong start into the new financial year. As a result, the shares of the traditional company from Geneva separate only a few francs from the record high of the late summer four years ago.
And in fact, the interim report released in the run-up to the General Assembly on Wednesday knows the surpassing analysts' estimates. Not least thanks to a favorable benchmark from the previous year, sales in the first five months of the fiscal year 2017/18 rise by 10 percent (expected 9 percent) in local currencies and by 12 percent in local currencies (10 percent).
Nevertheless, the Richemont share falls victim to the SIX Swiss Exchange. After an early session of 86.80 Swiss francs, it lost 1.7 per cent to 87.35 Swiss francs at the hour. According to observers, investors are in a lukewright position after the strong course development of the last few weeks.
"The (luxury goods) empire strikes back," headed the Zurich Kantonalbank's author of a commentary. He plays on the well-known cinema series "War of the Stars". In his view, the growth in sales in local currencies exceeded the expectations mainly due to a strong recovery in the wholesale business. In the wake of the well-known stock purchases of the past few days, growth was only 7 percent, according to the analyst. He welcomed the improvement of the product mix in the direction of the high-margin jewelery business and hopes in this context increasing consensus estimates. The Richemont share is recommended for purchase at Z├╝rcher Kantonalbank with "overweight".
Strong jewelry business as well as recovery in China and Hong Kong
The professional colleague of Baader-Helvea also finds positive words. However, he refers, on the one hand, to the worldwide reawakened demand for watches and other luxury goods and on the other hand to the relatively low comparison base from the previous year. Nevertheless, he also sees room for slightly upward consensus maintenance. The analyst now classifies the stock with "Hold" and a price target of 80 francs.

Price development of the Richemont share around the interim report (Source: www.cash.ch)
At Kepler Cheuvreux and RBC Capital Markets, the strong performance in the jewelery business is described as a true light of the interim report. The same is true of the double-digit sales growth in the key markets of China and Hong Kong.
Investmentbank is turning from negative to positive for the stock
The Morgan Stanley luxury goods analyst feels that the Richemont share might even climb to CHF 150 in the interim report. It is evident that the strong contribution to growth from the jewelery business, which is considered to be a marvelous business, is clearly appreciated. Officially, the stock with overweight and a price target of 103 francs is recommended for purchase.
Merrill Lynch ranked #Richemont's shares as BUY (Underperform) after the interim report. $ CFR
– cashInsider (@cashInsider) September 13, 2017
As can be seen from London, the Bank of America Merrill Lynch takes the interim report as an opportunity to raise the Richemont share by two stages from "Underperform" to "Buy". It is alleged that the American investment bank expects a strong positive impact on margins from the strong jewelery business.
The fact that the share is still under pressure, traders attribute the disappointing sales trend in Europe as well as the prematurely proving hope of an increase in the company's own profit forecasts.

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